UK Tar Sands Network

London Rising Tide are supporting the UK Tar Sands Network and are combining meetings for the near future. For more information please visit http://www.no-tar-sands.org/ or http://tarsandsinfocus.wordpress.com/

The Tar Sands
Visible from space, the tar sands mines and processing facilities in the province of Alberta, Canada have been labelled the largest industrial project on earth.

Containing some 173 billion barrels of recoverable oil the potential resource ranks second to Saudi Arabia in the oil reserves table. If it is all developed it will place a scar on the face of Alberta the size of England.

But tar sands oil is no ordinary oil. It is in fact a degraded form of oil known as bitumen and it mostly exists in deposits heavily mixed up with sand, clay and water. Producing oil from it involves processes that are highly energy intensive, water intensive and destructive of forest and land. It produces billions of litres of toxic waste and has been poorly regulated by a provincial government that prioritises oil over all other interests.

20% of the existing resource is shallow enough to be mined in open-cast pits. This has been the main focus of the industry to date. However, the 80% that is too deep to be mined must be extracted by heating the bitumen in the reservoir with steam. This is called in situ production and is more energy intensive than mining. In situ production constitutes 45% of production today but is set to grow significantly in the near future if the industry gets its way.

Mining for Oil
Mining tar sands is similar to open-cast mining for other minerals such as coal, copper or gold. The land is completely cleared and the top layers of soil removed. For every barrel of oil, giant hydraulic shovels remove 2 tons of peat and earth followed by another 2 tons of bitumen laden sand. The sands are loaded into 400 ton trucks - the biggest in the world - to be carried to a processing plant. The trucks burn 50 gallons of diesel an hour.

At the processing plant the bitumen is separated from the sand and clay using up to 12 barrels of heated water per barrel of oil. Around 70% of this water can be reused bringing water usage per barrel of oil down to about 2-4 barrels.

The water that is not reclaimable is pumped into huge waste lakes that embody the toxic legacy of the tar sands. These giant toxic lakes currently cover 130km2, an area larger than the city and metropolitan area of Manchester, and contain over 720 billion litres of poisonous water. Toxins include naphthenic acids, phenolic compounds, ammonia-ammonium and trace metals, such as copper, zinc and iron.

The regulation of these lakes has been rudimentary and leakage into the wider environment has been estimated at 11 million litres a day. In 2009, the Alberta government finalised regulations that requires companies to reduce a portion of the volume of tailings waste. But if tar sands mining expands to the levels the industry envisages, the lakes will still grow to over 300 km2.

The only program for monitoring and measuring the impact of tar sands production on the aquatic environment is oil industry funded and has been found to use an analytically weak, biased and inconsistent approach. This group has unsurprisingly claimed that there is no significant contamination caused by the oil industry.

In situ production: cooking oil out of the ground
For the 80% of tar sands that is too deep to be mined the companies must use in situ methods of getting to the bitumen. Drilling wells into the ground and simply pumping won’t do it as the bitumen has a consistency similar to peanut butter and won’t flow into a production well. A number of methods have been designed to heat the bitumen in place so that it will flow to a production well.

This involves boiling water using natural gas to make steam to inject into the well. A typical project using Steam Assisted Gravity Drainage (SAGD) will use 1000 cubic feet of natural gas per barrel of production. Although 90% of the water used can be recycled into the process in theory, the cumulative water draw remains a real threat to water resources in the region.

Although less dramatic than the total destruction caused by mining, in situ production still has a devastating impact on the forests and wildlife in which it is located. Seismic exploration lines, complex networks of pipelines carrying steam and oil, power and steam generating plants, product collection tanks, well pads and roads mean that in most project areas you are never much further than 250 meters from an industrial feature. The kind of forest destruction caused by in situ production has been described as “death by a thousand cuts”. The total area that could be impacted if all projects go ahead is 13.8 million hectares, which is roughly the size of Florida.

Upgrading: a massive extra step in the process
As the bitumen produced is not ready to be refined into products such as gasoline and diesel, it must be sent to refinery-like complexes called upgraders first. Upgraders use intense heat and pressure to ‘crack’ the compounds in the bitumen and convert it to synthetic crude oil. The process uses lots of water and energy and accounts for 65-85% of the greenhouse gas emissions of the entire process. Upgraders like refineries emit numerous other pollutants including sulphur dioxide, nitrogen oxides and hydrogen sulphide.

Who is involved?
In the past ten years, as the tar sands boom took shape, every major international oil company has taken a stake in the tar sands. Prior to this it was specialised Canadian companies that dominated the sector. Companies such as Shell and Exxon (Esso in the UK) have been involved for years but BP became the last of the bunch to join the tar sands frenzy when in 2007 it signed an agreement with Husky Energy.

BP’s project has yet to gain full sanction and a decision to go ahead is expected to be made in the first half of 2010. The project, called the Sunrise Project, uses SAGD and will be developed in four phases reaching 200,000 b/d (barrels per day) at full development. The bitumen will be piped to BP’s Toledo refinery in Ohio to be upgraded and refined. BP is also mid-way through retooling its Whiting refinery in Indiana to receive tar sands crude, which it will source from the market.

Shell has had a toe-hold in the tar sands since 1956. Its first commercial project started in 1986. Today Shell positions itself as “the leading oil sands operator” and has invested billions of dollars pursuing that title. It is the operator and owner of 60% of the Athabasca Oil Sands Project (AOSP). This mining project has the capacity to produce 155,000b/d and is currently undergoing an expansion that will add 100,000b/d of new capacity. Shell operates an upgrader in Edmonton to upgrade all of the production from these mines.

Over the years Shell has acquired leases adjacent to its original mine site and has expansion plans that could one day see production of 770,000 b/d. It also has in situ production projects at two other sites in Alberta both of which have the potential to be expanded significantly.

In 2006, Shell made one of the biggest land purchases in the history of the tar sands paying over US$500 million for 90,000 hectares of land under which lies bitumen locked up not in sand but in limestone rock. No company has perfected a reliable method for producing the oil in these formations and the company says that no decisions will be made about commercial production until at least 2015. The purchase was indicative of the company’s resolute commitment to bitumen production.

In 2008 Shell said that it holds about 20 billion barrels of oil in its tar sands leases. This represents around 30% of its total resources. This high proportion of resources concentrated in the tar sands marks Shell out to become the most carbon intensive oil producer among its peers.

Scraping the Bottom of the Barrel: Desperate times call for desperate measures
Many may wonder how it makes sense to expend so much energy and destroy so much land and water to produce expensive polluting oil. This is especially so when it is clear that we need to reduce our dependence on fossil fuels and create a clean energy future to avoid dangerous climate change. The truth is it doesn’t make sense. That is unless you’re an oil company with its back against the wall and a strong resistance to real change.

The international oil companies that are exploiting the tar sands are desperate for new sources of oil. They have sucked dry America, the North Sea and other provinces and are unable to adequately access easier to produce oil in OPEC countries due to politics. Access they do have in places such as the Caspian Sea and Africa do not match up to the resources that are fast depleting. They are faced with downsizing, changing their focus to gas and alternative sources of energy or scraping the bottom of whatever barrels they can find. Tar sands, with its high expense, massive processing requirements and excessive pollution is the perfect manifestation of that last option.

But does it have to be this way? Do we really need tar sands oil? Tar sands crude is only really consumed in Canada and the USA but as oil is a global commodity it is global oil demand that drives the tar sands as much as the USA’s outrageous inefficiency.

What has become increasingly evident is that as oil has become more expensive it has encouraged the move to more expensive resources such as tar sands. But more recently it has also become clear that it is encouraging a significant shift towards efficiency and demand reduction. Figures from the last 3-4 years and forecasts based on new efficiency policies emerging in the US and elsewhere show that the demand for oil has peaked in developed countries and is starting to come down. Analysts suspect that the peak in the USA was actually in 2005. The dawn of a new age of efficiency and electrification is starting to herald the end of the oil age.

But it is not a simple transition. Demand will continue to rise in developing countries although signs are that countries such as China will also achieve much greater efficiencies in oil use than had been previously thought. Much stronger polices must be enacted in developed countries to encourage the growth of much more efficient transport in order to reign in oil demand. What has really changed in the last two years is the realisation that we can achieve much greater efficiency gains in a much shorter space of time than we had previously understood.

As tar sands requires much greater investment than most other forms of oil development and is more expensive to produce on a daily basis, it is tar sands production that will stop first when we finally control our oil addiction. The oil companies do not think we can do it but we can.

The Western Flow: How we can stop the torrent of investment to the tar sands
While it currently appears that there is no flow of tar sands crude oil eastwards to the UK from Canada there is a huge pipeline flowing west to Canada but it is not filled with oil. It is filled with money. Banks such as Royal Bank of Scotland and HSBC invest in specific projects through project finance investment.

More significantly it is likely that most of us own a small piece of the companies that are producing tar sands oil. If you have a bank account, a pension or even insurance of any kind the chances are some of your money is finding its way to the tar sands. Your bank, insurance company and pension fund manager is taking your money and investing it in the stock market. In the UK, the stock market is dominated by two oil giants constituting between 14-18% of the FTSE 100 at any one time. Those two companies are BP and Shell.

The greatest impact we can have on the tar sands today is to tell our pension funds, banks and insurance companies that we want them to say no to BP and Shell’s tar sands investments.

Reports:
General Info:
http://www.oilsandswatch.org/oilsandsmyths

http://www.oilsandswatch.org/pub/203

http://assets.wwf.org.uk/downloads/scraping_barrell.pdf

In situ production:
http://www.oilsandswatch.org/pub/1262

Upgraders:
http://www.oilsandswatch.org/pub/1654

BP and Shell and the tar sands:
http://www.greenpeace.org.uk/files/pdfs/climate/RisingRisks.pdf

http://www.greenpeace.org.uk/files/pdfs/climate/shifting-sands-bp-shell…

Tar Sands and the Carbon Capture Myth:
https://www.co-operative.coop/Corporate/PDFs/Tar%20Sands%20CCS.pdf

Websites:
http://www.oilsandswatch.org/
http://www.dirtyoilsands.org/
www.oilsandsreview.com